Dying to save the planet

The news on global warming is so bad these days its easy to just lose oneself in a funk of depression. So its important to remember that this is a problem we certainly can solve, if we have the political will.

To replace all electricity sources in the world with renewables, plus back-up storage would cost about 3% of GDP over the next ten years, even if there are no significant breakthroughs in that time. That's a lot of money - about 1.5 trillion dollars. More if you allow for increased consumption. Do it more slowly and the cost comes down a lot, but then again this is just the electricity component. Phasing out petrol and doing something about emissions from agriculture are likely to cost more.

These sort of figures lead the inactivitsts to say its all too hard. They prefer to avoid the fact that the world spent more than this on invading Iraq. Generally speaking most people assume that if we're going to come up with those amounts of money we're either going to have to slash defense budgets, or do things that really hurt.

But I wonder if bequests are not an alternative source of this kind of money.

Very soon, the Baby Boomers are going to start dying in large numbers. The oldest are 62, which is getting close to the point where mortality rates shoot upwards. Let me stress this is not something I am happy about. I don't go in for the Boomer-bashing common amongst my fellow Xers, and those born before the boom. And discussion of Boomer mortality can't but remind me that my parents are pre-Boomers and I don't want them dying any time soon.

But Boomers will die whether I want them to or not, and its worth thinking about the consequences. The Boomers are not just the largest generation in the history of the developed world, and the richest. They are also the first with fewer offspring than themsleves.

Prior to the Boomers, even childless people usually had quite a few nephews and nieces to leave their wealth to. Boomers, generally speaking, do not. They might have one or two, but mostly their younger relatives are quite well provided for by a mix of parents and other uncles and aunts. They are in a position to leave a fair chunk of their wealth to charity without leaving those close to them in poverty.

In most countries this is going to be a huge boon to the state. Death duties haven't raked in all that much up till now, because people with children exploit loopholes to avoid them. But as more and more of those dying don't need to worry about close relatives, that's likely to change.

Australia is stupid enough to be one of the few nations without probate taxes, and we're really going to feel the pinch.

Nevertheless, this is all a bit of a side issue, since probate taxes are usually a relatively small portion of the total. The real test is going to be what wealthy people who don't have kids to provide for choose to do with their money. Many will shower it on relatives who don't need it, or find other ways to fritter it up against the wall. Others will give to art galleries and museums - worthy causes but not world-saving.

But if people get serious about putting the money into a mix of environmental projects and aid to the developing world, we may find that problems that seem intractable are a lot easier to fix than we thought.